By catalyzing hydrolysis of cAMP and cGMP, cyclic nucleotide phosphodiesterases (PDEs) are critical regulators of intracellular concentrations of and biological processes mediated by cyclic nucleotides. Seven PDE gene families have been identified. We have focussed on PDE3s or cGMP-inhibited PDEs, which are characterized by their high affinity for cAMP and cGMP, their specific inhibition by drugs that increase myocardial contractility, relax airway and vascular smooth muscle and stimulate insulin secretion, and their rapid activation in response to insulin and agents that increase cAMP. We have identified two PDE3 subfamilies, PDE3A and B, which are products of distinct but related genes, located by fluorescent in situ hybridization to human chromosomes 12p12 and 11p15, respectively. The domain organization of PDE3A and B isoforms is identical with predicted homologous catalytic domains in the C-terminal half of the PDE molecules and divergent N-terminal regulatory domains which contain large hydrophobic regions with several predicted transmembrane segments and downstream consensus sites for phosphorylation by protein kinase A. Activation of a rat adipocyte PDE3B is important in the antilipolytic action of insulin; in collaborative studies, we found that in intact rat adipocytes serine 302 of a membrane associated PDE3B (based on its deduced sequence) is phosphorylated by A-kinase and an insulin-stimulated kinase. Expression of "full-length" and truncated recombinant PDE3s in fibroblasts, COS cells, Sf9 insect cells and E. coli demonstrated that the catalytic core of PDE3s includes the catalytic domain conserved among all mammalian PDEs plus some additional N- and C-terminal sequences, and that the N-terminal half of the molecules was not required for catalytic activity, low Km for cAMP and cGMP or sensitivity to specific inhibitors. Biochemical studies with PDE3 N-terminal deletion recombinants and immunofluorescent localization of FLAG-epitope-tagged PDE3 recombinants indicate that the N-terminal hydrophobic domain is important in association of PDE3s with intracellular membranes.